Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Hercules Offshore Earnings Conference Call. My name is Stephanie, and I'll be your operator for today. [Operator Instructions] I would now like to turn the call over to your host for today, Mr. Son Vann, Director of Investor Relations. Please proceed.

Son Vann

Thank you, Stephanie. Good morning, and welcome to our third quarter 2011 earnings conference call. With me today are John Rynd, Chief Executive Officer and President; Stephen Butz, Senior Vice President and Chief Financial Officer; and members of our senior management team including Jim Noe, Senior Vice President and General Counsel, and Troy Carson, Chief Accounting Officer.

This morning, we issued our third-quarter results and filed an 8-K with the SEC. The press release is available on our website, herculesoffshore.com. John will begin today's call with some broad remarks regarding our quarterly performance and current outlook. Stephen will follow with a more detailed discussion on financial results, as well as provide cost guidance. We will then open the call up for Q&A.

Before we begin, please note that this conference call will contain forward-looking statements. Except for statements of historical facts, all statements that address our outlook for 2011 and beyond, activities, events or developments that we expect, estimate, project, believe or anticipate may or will occur in the future are forward-looking statements. Forward-looking statements involve substantial risks and uncertainties that could significantly affect expected results. Actual future results could differ materially from those described in such statements. You can obtain more information about these risk factors in our SEC filings, which can be found on our website as well as SEC's website, sec.gov.

With that, it's my pleasure to turn the call over to John.

John T. Rynd

Good morning, everyone, and thanks for joining us today. This morning, we reported a third quarter 2011 net loss from continuing operations of $17 million or $0.12 per diluted share compared to a loss of $16.1 million or $0.14 per diluted share for the third quarter 2010.

We are encouraged by several positive developments that occurred in the third quarter and have extended into this current quarter. Notably, the strong improvement in our U.S. Gulf of Mexico drilling operations that I will discuss in greater detail later on the call.

We are also successful in recontracting the Hercules 261 and 262 for 3 years to Saudi Aramco at very attractive terms, which is a testament to the solid operational performance of these rigs and our strong relationship with this key international customer. Hampering these positives were 2 unexpected events that occurred at the end of the quarter. First, was in the International Offshore segment where the Hercules 185 suffered a loss of one of its spud cans and leg damage. We previously filed an 8-K. But to recap, on September 18, while undergoing a required inspection of the rig, we discovered that the spud can had detached from the starboard leg. Upon this discovery, the rig was immediately moved to the nearest sheltered point, which is in Congo, to secure the rig. The rig was subsequently towed to Port Gentil, Gabon in preparation for a loadout on the heavy lift to the shipyard for repairs.

We reviewed several shipyards and elected to go with Signal Yard in Pascagoula, Mississippi as it offered the best option in terms of overall cost, yard capability and logistics. We expect the load on the heavy lift carrier by no later than this weekend, and commits the anticipated 24-day voyage to Pascagoula. Once at the shipyard, we can complete the inspection of the damage, assess the full extent of the damage and identify the scope of the repairs, reinstall new spud can and perform all other repairs to the rigs. Stephen will discuss in detail the financial impact of the incident. But in total, we continue to expect the rig to be out of service for approximately 6 months. We have kept Chevron Angola informed of all developments, and the client continues to express their desire to accept the rig back and get to work once again once the repairs are complete.

The second incident occurred in the Domestic Liftboats segment. Later of September 30, one of our 140-foot class vessels, the Starfish, was hit by multiple waterspouts that converged on the vessel, causing it to capsize. Waterspouts are essentially tornadoes over water. All 5 crew members onboard evacuated and were rescued shortly after the incident. Aside from minor injuries, all 5 are doing well.

Our underwriters has determined that the Starfish is a constructive total loss. Consequently, we received the fully insured value for the vessel of $2.5 million. We have received U.S. Coast Guard approval for our wreck removal plan and engaged a third-party service provider to perform the salvage operation, which began this morning. We have insurance coverage for the costs of the salvage operation. Needless to say, the Starfish incident was unfortunate but I have no doubt that our heavy emphasis on safety training led to the crews' rapid response. We continue to review the incident and we'll use what we learned from the investigation to further improve on our training and operational procedures.